Akanda Corp. (the “Company”) is domiciled in Canada and was incorporated on July 16, 2021. The Company’s registered office is 77 King Street West, Suite 400, Toronto-Dominion Centre, Toronto Canada, Ontario, M5K 0A1. The Company, through its subsidiaries. operates as a cannabis cultivation, manufacturing, and distribution company. The Company is also in the business of leasing fiber optic networks and telecommunication towers, through its subsidiary First Towers which is based in Mexico.

The Company was incorporated for the designed purpose of becoming the ultimate parent company of Cannahealth Ltd. (“Cannahealth”), through a reorganization of entities with common control. The share purchase agreement became unconditional on or about November 3, 2021 and the Company acquired the shares in the aforementioned entities from Halo Collective Inc. (“Halo”).

On April 29, 2022, the Company, through its wholly owned subsidiary, Cannahealth, acquired 100% of the Ordinary Shares of Holigen Limited (“Holigen”) and its wholly-owned subsidiary, RPK Biopharma Unipessoal, LDA (“RPK”) from the Flowr Corporation. On March 24, 2024, the Company sold RPK.

On February 28, 2024, the Company incorporated a new subsidiary – 1468243 B.C. Ltd.

Prior to the liquidation event on May 30, 2025 described below, the Company, through its subsidiary Canmart Ltd. (“Canmart”), is also in the business of sales and distribution of cannabis-based products for medical use, which is based in the United Kingdom (“UK”). During the first quarter of 2025, the Company evaluated the current state of Canmart and has determined to discontinue and cease it UK operation. The Company filed for creditor’s voluntary liquidation and had the winding up commenced on May 30, 2025 (note 5). At December 31, 2025, the Company no longer controlled Canmart and derecognized all assets and liabilities at their book values on May 30, 2025 and wrote down all balances to $nil. The Company accounted for the operating results of Canmart which was a net loss of $26,013 as a discontinued operation during the year ended December 31, 2025 and has reclassified the operating results of Canmart as a discontinued operation for the year ended December 31, 2024.

On August 19, 2025, the Company acquired 100% of the common shares of First Tower and Fibers Corp. (“First Towers” or “FTFC”) together with its subsidiaries, Canadian Towers & Fiber Optics S.A. de C.V. (“CTFO Mexico”) and Canadian Towers S.A. de C.V. (“CT Mexico”) from the shareholders of First Tower (note 4).

The Company’s condensed interim consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company incurred a net cash outflow of $3,194,676 from operating activities for the six months ended June 30, 2026. As of June 30, 2026, the Company had working capital deficit of $9,682,542 and has accumulated losses of $109,288,510. The continuing operations of the Company are dependent upon its ability to raise further cash funding by way of issuing debt and/or equity, as well as its ability to generate cash profits from its investments in First Towers in the near future.

The Company is an early-stage company and is primarily dependent on externally provided financing and revenue generated by its subsidiary to continue as a going concern. Additional funds will be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on satisfactory terms. Furthermore, there is no assurance that the Company will be profitable. Management intends to finance operating costs over the next twelve months with its cash on hand, equity and debt financing, and/or additional cash that will be generated from operations. The Company does not at this stage have any firm plans or commitments regarding further financing.

These uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern. These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities which might be necessary should the Company be unable to continue in existence.

These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting and have been prepared using the same accounting policies and methods of application as those used in the Company’s audited consolidated financial statements for the year ended December 31, 2025.

These condensed interim consolidated financial statements have been prepared on an accrual basis, except for cash flow information, and are based on the historical cost, modified where applicable and related to the valuation of certain financial assets and financial liabilities to fair value.

The Company and its subsidiaries are measured using the currency of the primary economic environment in which each subsidiary operates - the functional currency. The Euro is the functional currency of the Company’s Holigen and Cannahealth, Great British Pounds is the functional currency of the Company’s former Canmart business, Mexican Peso is the functional currency of CTFO Mexico and CT Mexico and Canadian Dollars is the functional currency of First Towers, 1371011 and Akanda while the United States Dollars is its reporting currency.

These condensed interim consolidated financial statements are prepared and presented in United States Dollars (“USD” or “$”), which is the Company’s reporting currency. All financial information has been rounded to the nearest dollar except where indicated otherwise.

The preparation of condensed interim consolidated financial statements in conformity with IFRS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses during the year. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Areas in which management has made critical judgments in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the condensed interim consolidated financial statements include the determination of the Company’s and its subsidiaries’ functional currencies. Information about key assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year is presented in the Company’s audited consolidated financial statements for the year ended December 31, 2025.

These condensed interim consolidated financial statements do not include all the information required of the audited annual financial statements and are intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in the financial position and performance of the Company since the end of the last annual reporting period. The accounting policies followed in these condensed interim financial statements are the same as those applied in the Company’s most recent audited annual financial statements for the year ended December 31, 2025. Therefore, it is recommended that this financial report be read in conjunction with the audited annual consolidated financial statements of the Company for the year ended December 31, 2025.

On August 22, 2025, the Company consummated the Business Combination pursuant to the Share Exchange Agreement ( “SEA”), as amended on August 19, 2025, with First Towers & Fibers Corp. (“First Towers”), a corporation existing under the laws of the Province of British Columbia. Pursuant to SEA, all of the common shares of First Towers have been acquired by the Company and in exchange, the Company will issue Class A Special Shares and Class B Special Shares and cash payable over time and evidenced by a promissory note. As a result of the closing, which was effective on August 21, 2025 but dated as of August 19, 2025, First Towers became a wholly owned subsidiary of the Company together with its subsidiaries, CT Mexico and CTFO Mexico.

Consideration Shares

The Company did not issue any of its common shares as of the closing, as originally contemplated by the SEA. On August 29, 2025, the Company held a Special Meeting of Shareholders and approved the creation of new classes of securities, including Class A Special Shares convertible into Company common shares on a one for one basis and Class B Special Shares convertible into Company common shares on a one for one basis. After the Special Meeting and the approval of the new classes of securities, the Company issued post-consolidated 6,441 Class A Special Shares in accordance with the terms of the SEA, as amended. On November 28, 2025, the Company held a second Special Meeting of shareholders and approved the issuance of an aggregate of post-consolidated 212,265 Class B Special Shares issuable to the former First Towers shareholders pursuant to the terms of the SEA, as amended (note 15).

Consideration Note

In connection with the closing, the Company entered into a promissory note with a First Towers Shareholder (the “Consideration Note”), in lieu of the Company issuing Class A Special Shares and Class B Special Shares as consideration to such shareholder. The Consideration Note is in the principal amount of $14,133,966. It has a maturity date of August 19, 2027 and has an interest rate of 16% per annum payable quarterly. In addition, the Company paid to the holder of the Consideration Note a commitment fee of $424,019, recorded as interest expense in the consolidated statements of loss and comprehensive loss. The Consideration Note is secured by all of the assets of the Company pursuant to a General Security Agreement dated as of August 19, 2025.

As of June 30, 2026, the Company made a total repayment of $8,500,000, of which $6,500,000 was paid during the year ended December 31, 2025 and $2,000,000 was paid during the six months ended June 30, 2026. The Company also recorded an interest expense of $454,025 (2025 – $nil) during the six months ended June 30, 2026. As at June 30, 2026, the Consideration Note balance including interest was $6,536,408 (December 31, 2025 – $8,082,383). The Consideration Note balance is presented separately in the condensed interim consolidated statements of financial position of which the remaining principal of $6,082,383 (December 31, 2025 – $7,633,966) was accounted under non-current secured promissory note and the interest payable of $454,025 (December 31, 2025 – $448,417) was recorded under loans and borrowings.

First Towers owns and operates 700+kms 5G dark fiber network in central Mexico, where some of the strongest industrial and fastest growing state economies in Mexico are located, with multinational telecommunications giant Telefonica as anchor under a 20-year leasing contract. During the six months ended June 30, 2026, First Towers expanded its dark fiber network with the addition of approximately 200+kms, increasing total network coverage to approximately 900+kms across Central Mexico.

The purchase of First Towers has been accounted for by the acquisition method, with the results of First Towers included in the Company’s results of operation from the date of acquisition. For accounting purposes, the acquisition of First Towers was determined as being a business combination in accordance with IFRS 3, with the Company identified as the accounting acquirer and First Towers as the acquiree. The fair value of the total consideration has been allocated as below:

During the year ended December 31, 2025, the Company recorded a goodwill of $39,572,129, representing the fair value of net liabilities acquired of $5,139,442 and the fair value of consideration of $34,432,687. The fair value of the net asset acquired was determined by an independent valuer using the discounted cash flow method of valuation.

From the date of acquisition, the operations of First Towers contributed a net loss of $564,023 primarily due to the fact that First Towers was substantially in early revenue stage. If the acquisition had taken place on January 1, 2025, the operations of First Towers would have contributed net gain of $3,263,489 for the year ended December 31, 2025.

The Company performed its annual test for goodwill as at December 31, 2025. The Company did so by comparing the sum of the carrying value of the CGU of First Towers and the carrying value of goodwill against the fair value of First Towers’ business. Based on the impairment test, the carrying value for both goodwill and CGU far exceeded the fair value of First Towers’ business. As a result, goodwill was fully impaired as at December 31, 2025 and an impairment loss of $39,572,129 was recorded in the consolidated statements of loss and comprehensive loss during the year ended December 31, 2025 (note 10).

During the six months ended June 30, 2026, the acquired business contributed $404,394 in revenue and a net loss of $164,992 to the Company’s consolidated results.

Assumption of First Towers Indebtedness

In connection with the First Towers Transaction and the Closing, the Company entered into a Debt Settlement Agreement (the “PGC DSA”) and a Convertible Promissory Note (the “PGC Note”) with PGC Finco Inc. (“PGC”), and a Debt Settlement Agreement (the “Dunstan DSA”) and a Convertible Promissory Note (the “Dunstan Note”) with Dunstan Holdings Ltd. (“Dunstan”).

In satisfaction of all indebtedness of First Towers to PGC, the Company assumed indebtedness of First Towers in the aggregate principal amount of $4,153,078 which is evidenced by the PGC Note and the aggregate interest payable capitalize into a new loan of $2,068,633 which is evidenced by the PGC DSA. The Company agreed to pay PGC, in settlement of PGC DSA, a cash payment of $500,000 and issue to PGC, upon shareholder approval therefore, 24,762 Class B Special Shares.

In satisfaction of all indebtedness of First Towers to Dunstan, the Company assumed indebtedness of First Towers in the aggregate principal amount of $756,917 which is evidenced by the Dunstan Note and the aggregate interest payable capitalize into a new loan of $602,325 which is evidenced by the Dunstan DSA. The Company agreed to issue to Dunstan, upon shareholder approval therefore, 7,787 Class B Special Shares in settlement of Dunstan DSA.

Each of the PGC Note and the Dunstan Note (collectively, the “Notes”) has a maturity date of August 19, 2031, has an interest rate of 8-1/2% per annum payable semiannually in arrears, and are secured by all of the assets of the Company. Each Note may be converted from time to time by either the Company or the holder of the Note, into common shares of the Company. As a result of the shareholders’ approval on November 28, 2025, the Company may issue up to 1,213,333 common shares, from time to time in accordance with the terms, which is the maximum number of shares issuable upon the conversion of $4,909,995 of principal, plus interest, under the 6-year convertible promissory notes. The conversion price shall be a price per share equal to the greater of (a) $6.12 and (b) a 10% discount to the seven-trading day VWAP immediately prior to receipt of the conversion notice.

The convertible debenture was determined to be a hybrid financial instrument with a liability and an embedded derivative liability. The Company has elected the option in IFRS 9 to recognize the convertible debenture as one financial instrument at FVTPL. At the time of issuance, the Company determined the principal amount of $4,909,995 as the fair value. During the year ended December 31, 2025, the Company assessed that the fair value of the convertible debenture had decreased and recognized a $766,013 gain on change in fair value of financial liabilities measured at FVTPL in the consolidated statements of loss and comprehensive loss. No reassessment on fair value was made during the six months ended June 30, 2026. As of June 30, 2026, the outstanding balance of the Notes was $4,143,982 (December 31, 2025 – $4,143,982).

During the year ended December 31, 2025, the Company paid $500,000 in cash and issued 32,549 Class B Special Shares with a fair value of $754,356 for the settlement of PGC DSA and Dunstan DSA (note 15). As a result of the issuance, the Company recognized a gain on debt settlement of $1,893,196 in the consolidated statements of loss and comprehensive loss.

During the six months ended June 30, 2026, pursuant to the payment terms on interest of the Notes, the Company paid PGC and Dunstan a total interest amounting to $155,506.

During the first quarter of 2025, the Company evaluated the current state of Canmart and has determined to discontinue and cease it UK operation. The Company came to this decision after receiving notification from Canmart’s directors that they intend to resign and thought out the difficulty in finding qualified replacements, among other things. The Company then filed for creditor’s voluntary liquidation and had the winding up commenced on May 30, 2025.

As at December 31, 2025, the Company no longer controlled Canmart and derecognized all assets and liabilities at their book values on May 30, 2025 and wrote down all balances to $nil. During the year ended December 31, 2025, the Company recorded a gain on loss of control of Canmart of $533,617. The Company accounted for the operating results of Canmart as a discontinued operation during the year ended December 31, 2025 and has reclassified the operating results of Canmart as a discontinued operation for the year ended December 31, 2024. Set out below is the financial performance and cash flow information for the year ended December 31, 2025 related to the discontinued operation:

Trade receivables represent amounts due from customers under normal credit terms, generally 30 to 90 days. As at June 30, 2026, there were two customers (December 31, 2025 – three customers) with an amount greater than 10% of the Company’s trade accounts receivable which represented approximately 86% of the balance (December 31, 2025 – 100%). The Company did not recognize any bad debt expense during the six months ended June 30, 2026 and 2025.

Sales taxes and other taxes recoverable consists mainly of Mexican value-added tax and other taxes recoverable which represented 97% of the balance as of June 30, 2026 (December 31, 2025 – 96%).

During the year ended December 31, 2025, the Company derecognized accounts receivable with a net book value of $78,737 in connection with the loss of control of Canmart (note 5).

Other prepayments and deposits consists of advances to suppliers for tower and fiber network construction, deposits, and or other services expected to be utilized within the next twelve months.

During the year ended December 31, 2025, the Company derecognized property, plant and equipment with a net book value of $3,067 in connection with the loss of control of Canmart (note 5).

In connection with the annual test performed for goodwill (note 10), the Company assessed that the sum of the carrying value of the CGU of First Towers (mainly PPE) and the carrying value of goodwill greatly exceeds the fair value of First Towers’ business. As a result, the excess of calculated impairment loss, after reducing goodwill, was pro-rated to PPE and ROU assets as at December 31, 2025. An impairment loss of $2,943,313 was recorded in the consolidated statements of loss and comprehensive loss during the year ended December 31, 2025.

The Company also performed an annual test for its land property as at December 31, 2025. The Company assessed that a significant portion of the net book value of land was impaired. An impairment loss of $2,158,885 was also recorded in the consolidated statements of loss and comprehensive loss during the year ended December 31, 2025.

During the six months ended June 30, 2026, the Company recognized depreciation of its property, plant and equipment of $136,126 (2025 – $15,322).

1900 Ferne Road, Gabriola Island, British Columbia

On September 19, 2023, and as amended on September 22, 2023 and September 24, 2025, the Company entered into an option agreement with 1107385 B.C. Ltd (“1107385”) to purchase farming land property and related operations and licenses from 1107385. To acquire the property, the Company must pay the following:

Pursuant to the amendment on September 24, 2025, the term contained in the option agreement has been extended to September 25, 2027. The Company plans during this additional two year period to develop Tetrahydrocannabinol (THC) and cannabidiol (CBD) facilities at this site. In exchange for such extension, the Company shall pay to 1107385 a total of $250,000, of which:

On September 5, 2024, Health Canada approved a hemp license for the Company. As a result, the Company was paid an additional $750,000 to 1107385 for completing one of the milestone events on September 16, 2024. During the year ended December 31, 2024, the Company completed the initial payment and acquired the right to develop the farming property.

The Company has been working on obtaining its full cultivation license for a variety of potential products containing THC. As of June 30, 2026, the Company has not yet cultivated any product from this land.

Pursuant to the option agreement, the Company agreed to pay to 1107385 the Value (as defined below) in cash from the proceeds of the Company’s next capital raising transaction from the date of its last amendment. For purposes hereof, “Value” means the U.S. dollar amount calculated as follows: (i) the product of the number of Ordinary Shares multiplied by the closing price of the Ordinary Shares on the Nasdaq Capital Market (or such other trading market or quotation system such shares are then traded or quoted) on the date of registration of certain shares of the Company held by 1107385, and (ii) subtracting the result of subsection (i) from US$600,000. As of June 30, 2026, the Company has not registered any of such shares or made any such payment to 1107385.

On January 1, 2025, the Company entered into a lease agreement for an office space with a monthly lease payment of $12,000 over a period of two years. The right-of-use assets recognized was measured at an amount equal to the recognized lease liabilities (note 12).

Pursuant to the acquisition of First Towers (note 4), part of the net assets assumed by the Company consist primarily of ground leases for tower and fiber infrastructure sites in Mexico. As of this period, First Towers owns and deployed 24 towers and an additional 6 are under construction. These assets are depreciated on a straight-line basis over the lease term.

During the year ended December 31, 2025, subsequent to the acquisition, First Towers completed the construction of 6 lease towers, and with this First Towers now have 30 cellular towers deployed. Of the six towers, three were leased and have the following monthly lease payment and terms: MX$6,500 over a period of 10 years, MX$4,000 over a period of 10 years and MX$5,000 over a period of 5 years. The lease for the remaining three towers is still pending and have been deemed as not yet available for use during the six months ended June 30, 2026. The right-of-use assets recognized was measured at an amount equal to the recognized lease liabilities (note 12).

During the six months ended June 30, 2026, the Company recorded amortization on its right-of-use assets of $75,042 (2025 – $69,466).

In connection with the annual test performed for goodwill (note 10), the Company assessed that the sum of the carrying value of the CGU of First Towers and goodwill greatly exceeds the fair value of First Towers’ business. As a result, the excess of calculated impairment loss, after reducing goodwill, was pro-rated to PPE and ROU assets as at December 31, 2025. An impairment loss of $137,785 was recorded in the consolidated statements of loss and comprehensive loss during the year ended December 31, 2025. The Company has not recognized any impairment losses on its ROU assets during the six months ended June 30, 2026.

During the year ended December 31, 2025, concurrent to the loss of control of Canmart, the Company derecognized Canmart’s cannabis distribution license with a net book value of $17,009 (note 5).

The Company performed its impairment test on goodwill and assessed that the sum of carrying value of CGU of First Towers and the carrying value of goodwill greatly exceeds the fair value of First Towers’ business. The calculated impairment loss was allocated to goodwill and other long-lived assets of First Towers – PPE (note 8) and ROU assets (note 9). Goodwill was fully impaired as at December 31, 2025 and an impairment loss of $39,572,129 was recorded in the consolidated statements of loss and comprehensive loss during the year ended December 31, 2025.

The obligations under the Loan will rank as the third ranking and most senior secured debt of First Towers. The Loan, together with all accrued interest, fees and other amount payable pursuant to the Loan Agreement, will be due and payable by First Towers in full on demand by the Company. In addition, First Towers has the right at any time to repay the Loan or any part of the Loan without premium, penalty or bonus. As general and continuing collateral security for the obligations under the Loan Agreement, First Towers agreed to execute and deliver to and in favor of the Company, a general security agreement creating a third-ranking security interest over all of First Towers’ property, an investment property pledge agreement creating a third-ranking security interest in all present and after acquired shares owned in First Towers (the “Pledged Shares”), a control agreement for the Pledged Shares, and an insurance transfer and consent, assigning certain insurance of First Towers to the Company as mortgagee, third loss payee and additional named insured as required by the Loan Agreement.

Pursuant to the Bridge Loan Agreement, the Company shall also advance to First Towers a $1,000,000 loan on the same terms as the existing Loan Agreement. During the year ended December 31, 2025, the Company lent out the following loans:

During the year ended December 31, 2025, the loan receivable balance including interest was terminated in consolidation as of the closing of the First Towers Transaction on August 19, 2025.

During the year ended December 31, 2025, the Company paid an additional amount of $220,030 (CAD307,437) of fees for services rendered by certain legal firms to Halo. These amounts, accounted as loans, are non-interest bearing, unsecured and have no specific terms of repayment. During the year ended December 31, 2025, the Company determined that the receivable balance are no longer collectible from Halo and recognized a write-off of $235,686).

On January 1, 2025, the Company entered into a lease agreement for an office space with a monthly lease payment of $12,000 over a period of two years. Under IFRS 16, the Company recognizes lease liabilities measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate.

Pursuant to the acquisition of First Towers (note 4), part of the net liabilities assumed by the Company consist primarily of ground leases for tower and fiber infrastructure sites in Mexico. As of the acquisition date, First Towers owns and deployed 24 towers and an additional 6 are under construction.

During the year ended December 31, 2025, subsequent to the acquisition, First Towers completed the construction of 6 lease towers, and with this First Towers now have 30 cellular towers deployed. Of the six towers, three were leased and have the following monthly lease payment and terms: MX$6,500 over a period of 10 years, MX$4,000 over a period of 10 years and MX$5,000 over a period of 5 years. The lease for the remaining three towers is still pending and have been deemed as not yet available for use during the six months ended June 30, 2026. All leases contain extension and termination options to provide flexibility in managing the portfolio. Under IFRS 16, the Company recognizes lease liabilities measured at the present value of the remaining lease payments, discounted using First Towers’ existing incremental borrowing rate.

During the year ended December 31, 2024, the Company received additional loans of CAD$87,133 ($65,282) from an arm’s length parties. These loans bear the same interest of 7% per annum, unsecured and payable within 12 months.

The Company made a partial repayments of $102,585 during the year ended December 31, 2025. During the six months ended June 30, 2026, the Company recorded interest expense of $1,180 (2025 – $3,422) from these loans. As at June 30, 2026, the remaining loans balance including accrued interest was $40,018 (December 31, 2025 – $38,838).

September 2025 Notes Offering

On September 12, 2025, the Company closed the Securities Purchase Agreement entered on September 11, 2025 with certain institutional investors (the “September Investors”), to issue and sell to each of the September Investors a convertible promissory note (each, individually, a “September Note” and collectively, the “September Notes”), for aggregate gross proceeds to the Company of $12,000,000, before deducting fees to the Placement Agent and other expenses payable by the Company in connection with the offering (the “September Offering”).

The Company used the net proceeds (i) for marketing purposes of up to $3.5 million, (ii) for the renewal and continued development of the Company’s Gabriola, B.C. site, (iii) working capital and general corporate purposes of up $3 million and (iv) of up to $7 million for the repayment of certain indebtedness, of which approximately $6,500,000 was applied towards the partial payment of the Consideration Note.

As compensation for such placement agent services, the Company paid the Placement Agent $300,000 in cash, an aggregate fee equal to 2.5% of the gross proceeds from the September Offering, plus $50,000 for its fees and expenses.

The maturity date of each September Note is the 12-month anniversary of the issuance date of such September Note, and is the date upon which the principal amount, as well as any other fees, shall be due and payable. The Notes bear interest at a rate of 10% per annum.

The September Note was determined to be a hybrid financial instrument with a liability and an embedded derivative liability. The Company has elected the option in IFRS 9 to recognize the September Note as one financial instrument at FVTPL. Under this approach, the transaction costs of $350,000 incurred in relation to September Note was recorded in the consolidated statements of loss and comprehensive loss. At the time of issuance, the Company determined the principal amount of $12,000,000 as the fair value of the September Note.

During the year ended December 31, 2025, the Company issued 9,189,611 pre-consolidated common shares (408,427 post-consolidated common shares) pursuant to the conversion of an aggregate principal amount of $10,737,400, under the terms of the September Notes (note 15).

During the year ended December 31, 2025, the Company assessed that the fair value of the converted September Notes was $9,957,773 and the fair value of the remaining September Note was $1,055,420. As a result, the Company recognized a total of $984,807 gain on change in fair value of financial liabilities measured at FVTPL in the consolidated statements of loss and comprehensive loss.

During the six months ended June 30, 2026, the Company issued 421,360 pre-consolidated common shares (93,645 post-consolidated common shares), of which 372,446 pre-consolidated common shares (82,765 post-consolidated common shares) was for the full and final conversion of the remaining September Notes and the remaining 48,914 pre-consolidated common shares (10,870 post-consolidated common shares) was for the conversion of interest amounting to $165,821 (note 15). As a result of the issuance, the Company recognized a loss on debt settlement of $120,623 in the consolidated statements of loss and comprehensive loss.

January 2026 Notes Offering

On January 21, 2026, the Company closed the Securities Purchase Agreement entered on January 20, 2026 with certain institutional investors (the “January Investors”) to issue and sell to each of the January Investors a convertible promissory note (each, individually, a “January Note” and collectively, the “January Notes”), for aggregate gross proceeds to the Company of $7,000,000, before deducting fees to the Placement Agent and other expenses payable by the Company in connection with the offering (the “January Offering”).

The Company used the net proceeds from the sale of the January Notes for (i) marketing purposes of up to $2.3 million, (ii) working capital and general corporate purposes of approximately $2.6 million and (iii) the repayment of certain indebtedness of up to $2.1 million, of which approximately $2 million was applied towards the partial payment of the Consideration Note.

As compensation for such placement agent services, the Company paid the Placement Agent $70,000 in cash, an aggregate fee equal to 1% of the gross proceeds from the January Offering.

The maturity date of each January Note is the 12-month anniversary of the issuance date of such January Note, and is the date upon which the principal amount, as well as any other fees, shall be due and payable. The January Notes bear interest at a rate of 10% per annum.

The January Note was determined to be a hybrid financial instrument with a liability and an embedded derivative liability. The Company has elected the option in IFRS 9 to recognize the January Note as one financial instrument at FVTPL. Under this approach, the transaction costs of $70,000 incurred in relation to January Note was recorded in the consolidated statements of loss and comprehensive loss. At the time of issuance, the Company determined the principal amount of $7,000,000 as the fair value of the January Note. During the six months ended June 30, 2026, the Company has not reassessed the fair value of the January Note.

The Company has authorized share capital of an unlimited number of common shares, an unlimited number of Class A Special Shares, an unlimited number of Class B Special Shares, and an unlimited number of preferred shares, issuable in series, with no par value.

On August 26, 2025, the Company implemented a 1-for-3.125 Reverse Stock Split on its common shares. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole number.

On January 12, 2026, the Company implemented a 1-for-5 Reverse Stock Split on its common shares. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole number.

On April 13, 2026, the Company implemented a 1-for-4.5 Reverse Stock Split on its ordinary shares. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole number. All share and per share data in these consolidated financial statements have been retroactively restated to reflect the effect of the reverse stock split.

During the six months ended June 30, 2026, the Company had the following share capital transactions:

During the six months ended June 30, 2026, the Company had the following share capital transactions (continued):

During the year ended December 31, 2025, the Company had the following share capital transactions:

During the year ended December 31, 2025, the Company had the following share capital transactions (continued):

Class A Special Shares

On August 29, 2025, the Company approved an amendment of the Articles to create a new class of special common shares without nominal or par value (the “Class A Special Shares). The Class A Special Shares is convertible into Company common shares on a one for one basis. The holders of the Class A Special Shares shall be entitled to one vote for each Class A Special Shares held at all meetings of shareholders of the Corporation and shall vote as a single class with the Common Shares.

In the event of any Liquidation Distribution, subject to the prior rights of the holders of the shares of any other class ranking senior to the Common Shares and equal in rank to the Common Shares and Class B Special Shares, the holders of the Class A Special Shares shall be entitled to receive all remaining property and assets of the Corporation.

Class B Special Shares

On August 29, 2025, the Company approved an amendment of the Articles to create a new class of special common shares without nominal or par value (the “Class B Special Shares”). The Class B Special Shares is convertible into Company common shares on a one for one basis. The holders of the Class B Special Shares shall be entitled to one vote for each Class B Special Share held at all meetings of shareholders of the Corporation and shall vote as a single class with the Common Shares and the Class A Special Shares, other than meetings at which only the holders of another class or series of shares are entitled to vote separately as a class or series.

In the event of any Liquidation Distribution, subject to the prior rights of the holders of the shares of any other class ranking senior to the Common Shares and equal in rank to the Class A Special Shares and Common Shares, the holders of the Class B Special Shares shall be entitled to receive all remaining property and assets of the Corporation.

Issued and Outstanding

On August 29, 2025, the Company issued 6,441 Class A Special Shares with a fair value of $597,836 pursuant to the acquisition of First Towers in accordance with the terms of the amended SEA (note 4).

On November 28, 2025, the Company issued 212,265 Class B Special Shares with a fair value of $19,700,885 pursuant to the acquisition of First Towers in accordance with the terms of the amended SEA (note 4) and 32,549 Class B Special Shares with a fair value $754,356 pursuant to the settlement of PGC DSA and Dunstan DSA. In connection with the debt settlement, the Company recognized a gain on debt settlement of $1,893,196 in the consolidated statements of loss and comprehensive loss.

The weighted average number of common shares outstanding for basic and diluted loss per share for the six months ended June 30, 2026 was 525,042 (2025 – 30,840). The Company did not have any potential dilution during the six months ended June 30, 2026 and 2025.

In order to incentivize senior executive management and key staff, the Company makes use of equity incentives awarded pursuant to the Employee Share Ownership Plan (“ESOP”). In terms of the ESOP, as amended in March 2024, the Company may award up to 30% of the Company’s issued share capital (at any point in time) in qualifying ESOP incentives.

There were no RSUs granted and outstanding during the six months ended June 30, 2026 and the year ended December 31, 2025.

Transactions with Key Management Personnel

The Key Management remuneration is included in Consulting and Professional Fees and Personnel Expenses in the Statement of Operations.

As of June 30, 2026, the Company has balances payable to related parties of $759,995 (December 31, 2025 – $640,546) as below:

As of June 30, 2026, the Company has balances receivable from related parties of $nil (December 31, 2025 – $nil) as below:

During the year ended December 31, 2024, the Company paid and accrued an amount of $15,969 (CAD21,875) of fees for services rendered by certain legal firms to Halo, a company controlled by the interim CEO of the Company. The transactions were accounted by the Company as advances or loans to Halo. The loans are non-interest bearing, unsecured and has no specific terms of repayment.

During the year ended December 31, 2025, the Company paid an additional amount of $220,030 (CAD307,437) of fees for services rendered by certain legal firms to Halo. These amounts, accounted as loans, are non-interest bearing, unsecured and have no specific terms of repayment. During the year ended December 31, 2025, the Company determined that the full loan receivable balance are no longer collectible from Halo and recognized a write-off of $235,686.

On November 21, 2024, the Company entered into a Bridge Loan Agreement with First Towers & Fiber Corp., a corporation incorporated under the laws of the Province of British Columbia (“First Towers”), pursuant to which the Company agreed to loan to First Towers $350,000 (the “Loan”). Interest of the prime rate (as defined in the Loan Agreement) plus 2% will accrue and be calculated daily on the principal amount of the Loan on the basis of the actual number of days the Loan is outstanding in a year of 365 or 366 days, as applicable, and will be compounded and payable monthly in arrears on the first business day of each month.

Pursuant to the Bridge Loan Agreement, the Company shall also advance to First Towers a $1,000,000 loan on the same terms as the existing Loan Agreement. As of December 31, 2025, the Company lent out a total of $423,000. As at December 31, 2025, the loan receivable balance including interest was terminated in consolidation as of the closing of the First Towers Transaction on August 19, 2025.

The Company’s related party transactions are measured at the exchange amount which is the amount of consideration established and agreed to by the related parties.

Determination of Fair Values

IFRS 13, Fair Value Measurement, establishes a fair value hierarchy that reflects the significance of the inputs used in measuring fair value. The fair value hierarchy has the following levels:

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions market participants would use in pricing.

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following models. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.